Earnings Management Analysis Of ST-Listed Companies In China Based On Empirical Data After The New Accounting Standards In2006

With the promulgation and implementation of new accounting standards in2007,tosome extent,earnings management will be limited for Listed companies, especially for STlisted companies because of losses in consecutive two years. Currently, some scholarshave confirmed this conclusion through normative study, while empirical research is stilllacking.Due to the lag of the system itself, any system can not be perfect.In order topreserve their own interests, it is still possible for executors to engage in financialfraud.For listed companies,once the special treatment,if business performance can’t beenimproved to profitability within the prescribed period, it will face the risk ofdelisting,which will bring incalculable losses to investors, managers and otherstakeholders. Therefore, in order to avoid this situation happening, managers will try theirbest to increase revenue through a variety of means, timely remove the risk on their head,and then keep this precious resource of the listed companies.Therefore, based on the newperspective of the new accounting standards’ implement,the purpose of this study is toexplore the trend of earnings management behavior of ST companies empirically.The idea of this study is as follows，First of all,in detail,we elaborate the economicimpact that the ST system may bring to ST companies and the effect that new accountingstandards may cause to the companies’ earnings management.Secondly, in the face of thedual background including the special treatment and the new accounting standards,we putforward study hypothesis,which the ST company managers may engage in the trend ofearnings management.Finally, descriptive statistics and empirical analysis is our maintask.There are a total of seventy sample companies being specially treated in between2007and2009in china,we analysis its characteristics in earnings quality, earnings itemsand earnings trends. The final results are as follows, under the background of theimplementation of new accounting standards, for ST companies,a very strong incentive tomanage earnings manipulation still exists, meanwhile, compared to earnings managementwhich takes place before2006,there are some changes in the specific project ofmanipulation, such as the impairment of assets are greatly limited while subsidy income,investment gain and other line items have been enhanced.we analysis the impact that changes of accounting standards may bring to ST listedcompanies in the means of earnings management and earnings quality,which has important practical significance,firstly,it can provide investment decision-making basisfor the users of accounting information,secondly, a reference is offered to the accountingstandard setters when they evaluate the effectiveness the new criteria control earningmanagement, at the same time,it can provide the basis for the further improvement of theaccounting standards.